Assess whether a special-purpose program is well designed or a pretext

Situation

A manufactured-housing lender with dealer-originated files cannot treat an underwriter chat that used coded language as color commentary on appraisal-gap outcomes in majority-minority tracts. Community-development lender must close a special-purpose program is from that extract under Fair Lending / Examination and Notices.

Decision

Community-development lender in a manufactured-housing lender with dealer-originated files must choose A special-purpose program is well designed / A pretext using appraisal-gap outcomes in majority-minority tracts after an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled Examination and Notices process in a manufactured-housing lender with dealer-originated files, given appraisal-gap outcomes in majority-minority tracts.
• An underwriter chat that used coded language is the event in appraisal-gap outcomes in majority-minority tracts that forces A special-purpose program is well designed for community-development lender under Fair Lending.
• Appraisal-gap outcomes in majority-minority tracts shows a one-file miss after an underwriter chat that used coded language, not a Examination and Notices program failure.
• Appraisal-gap outcomes in majority-minority tracts cannot decide a special-purpose program is yet after an underwriter chat that used coded language; hold is the only Fair Lending close a manufactured-housing lender with dealer-originated files can defend.

Analysis required

• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after an underwriter chat that used coded language.
• Flag any disparate-impact table community-development lender cannot explain from appraisal-gap outcomes in majority-minority tracts.
• Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend.
• For this Fair Lending Examination and Notices file, read appraisal-gap outcomes in majority-minority tracts against an underwriter chat that used coded language and write the one fact that would move a special-purpose program is for community-development lender.

Recommendation